Moody's downgrades TPC

Moody's Investors Service said it downgraded TPC Group Inc.'s corporate family rating to Caa3 from Caa1, the probability of default rating to Caa3-PD/LD from Caa1-PD, the first-lien priming notes to B3 from B2 and first-lien notes to Caa3 from Caa2.

TPC entered into a forbearance agreement with its lenders in early February after a missed interest payment on its secured debt; this agreement was recently extended until April 18, and may be extended further. As part of the forbearance agreement, the company issued $52 million in added priming notes to a select group of noteholders.

“While the company and its private equity sponsors continue to work with noteholders to find a favorable resolution to the missed interest payment and to restructure the company's debt, the delays in reaching a solution are a negative for the credit. The downgrade to Caa3 reflect the fact that in bankruptcy, noteholders could be required to take a meaningful haircut to outstanding debt at TPC, given the uncertainty over future cash outflows related to the explosion and fire at TPC's Port Neches facility in November 2019,” Moody’s said in a press release.

The outlook is negative.

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